Supermarket bank launches new credit cards

The banking arm of supermarket giant Sainsbury's will step up the pressure on high street banks this week as it launches two new credit cards.

Sainsbury's Bank, a joint venture between Sainsbury's and Lloyds Banking Group set up in 1997, will launch a credit card based around its Nectar points award scheme, while the other is a new cashback card.

The bank, which offers loans, insurance and savings products, grew pre-tax operating profits by 40% in the financial year 2011/2012, which it puts down to linking its products with the Nectar scheme.

Hannah Bernard, Interim Chief Executive, Sainsbury's Bank said: "With the strength of our brand, the fact that we have developed a very robust and proven reward proposition for our customers, and with around 25% of all retail credit card transactions taking place in supermarkets, now is a very exciting time to launch a new credit card proposition."

The Sainsbury's Nectar Credit Card will enable shoppers using their card in-store at Sainsbury's to earn up to five times the number of points normally earned - 10 points earned per £1 spent - in the first three months, equal to up to 5% off a customer's shopping.

After this, Sainsbury's shoppers could earn rewards equivalent to 2% off their shopping.

Meanwhile, the Sainsbury's Cashback Credit card offers 5% cashback on purchases made in-store at Sainsbury's for the first three months, up to a maximum of £1,000 spend per month.

After the introduction period, card holders could receive a further £5 cashback each month when they spend at least £250 at Sainsbury's and at least £250 at other outlets.

The bank, which is headquartered in Edinburgh, has 1.4 millions active customers.